Category: Latin America

There have been two transcendental amendments to the industrial property law of Mexico, which are important to keep in mind for those EU SMEs who are planning to invest in our country.

The first amendment was published on March 13 2018, mainly in the field of Industrial Designs and Geographical Indications.

Industrial Designs:

Industrial designs refer to the appearance of a product, namely any element or combination of flat elements, with aesthetic or ornamental nature such as shape, colour, design, texture, with or without relief, that incorporated into an industrial or craft product (two-dimensional object), may serve as a pattern for industrial or handicraft production.

Most countries demand novelty as a minimum requirement for design protection.

Main changes: The concept of “new” is clarified for the effects of the registration of industrial designs, since previously it was stipulated that only designs created independently and that were different in a significant degree would be considered new, with no definitions given for “independent creation” and “significant degree”, now a creation is considered independent when no other identical industrial design has been made public before the filing date of the application or before the priority date, and an industrial design will be considered identical to another one, if it differs only in irrelevant details; the term “significant degree” is now stipulated as the general impression that and expert in the subject has on the industrial design, which should be different from the general impression caused from any other industrial design.

The validity of industrialdesigns has been modified, which was previously of 15 non-extendable years and that has changed now to 5 renewable years for equal periods of time up to a maximum of 25 years.

It is important to mention that, industrial designs registered before the entry of the mentioned decree will maintain their validity until the 15 years come to an end, and they will be able to be renewed for 2 successive 5 year periods, without exceeding the maximum of 25 years.

However, industrial designs’ applications submitted but not granted yet, could benefit from the new extension provided that the applicant opts in no later than 30 days after the entry into force of the reform.

Appellations of Origin and Geographical Indications:

Geographical Indications (GI) refer to signs that identify products by the name of their particular provenance, and stand out because of their quality, reputation or other characteristics which are essentially attributable to that geographical origin.

Appellations of Origin (AO) are similar to GI as long as both identify the geographic origin where a product is produced, and stand out by their quality, reputation or other characteristics, which are essentially attributable to that geographical origin as well. However, the main difference is that AO also take in consideration, the human and/or natural factors of the significant environment.

These two forms of protection are not mutually exclusive, thus they could coexist.

Main changes:

Unlike the Appellations of Origin, the figure called Geographical Indication is now included, which had been left out from the Mexican legislation.

The figure of expiration based on the lack of use for a period of 3 years is included regarding Appellations of Origin and Geographical Indication.

The Mexican Institute of Industrial Property (IMPI), will now recognize Appellations of Origin and Geographical Indications protected abroad, through a registry created by the Trademark Office.

Opposition is now introduced for Appellations of Origin and Geographical Indication, as long as the party justifies its interest to file the opposition according to the law.

The aforementioned reforms are now in force.

The second relevant amendment was published on May 18th, 2018 changing several things mainly in the fields of trademarks and opposition system.

Trademarks

Trademark is any sign, word, symbol, or a combination thereof that are capable of distinguishing the source of a product or a service on the market.

Main changes:

Non-traditional trademarks are recognized; before this amendment, only visible signs were susceptible for registration and now sensorial signs can be registered such as sounds and scents.

The recognition of “certification marks” is now included, which it is defined as a sign that distinguishes goods and services with qualities or other characteristics that have been certified by the owner of the mark, such as components of the product; the conditions under the products have been elaborated or the services have been rendered; the quality; process of the goods or service and the geographical origin of the goods.

The option of protecting geographical indications as certification marks is allowed.

The provision that required the registration of the trademark in order to obtain the statement of notoriously known or famous is abolished.

The statement of use is now mandatory, after the third year of registration of the trademark.

Trademark applications filed in bad faith will be now an impediment for registration and a cause of nullity if a registered trademark falls under this statement.

Generic and descriptive trademarks that through their use in the market have acquired distinctiveness will be susceptible for registration, known as “secondary meaning”.

“Trade dress” figure is now included, meaning that image elements of the trademark such as size, design, color, label, packaging, decoration or any other that combined distinguish goods or services in the market, will be susceptible for registration.

Coexistence agreements are now allowed, meaning that the registration of trademarks or commercial names similar to others already registered or in the process of registration will be allowed, as long as the consent is given by the owner or applicant with prior rights.

The period to file a cancellation action based on the prior use of a trademark, that has been used whether in Mexico or abroad has been extended from 3 to 5 years.

Opposition

The kind of proof that can be filed on opposition proceedings is now determined.

The possibility of filing closing arguments (allegations) after the response to the opposition has been filed is also included.

The PTO will now dictate resolutions regarding the oppositions, which was not mandatory before the reform.

In general, the opposition system recently introduced in Mexico is strengthen and improved.

The aforementioned reform will come into force on August 10th, 2018.

We hope that these measures will encourage EU SMEs to protect their intellectual property rights in Mexico.

Colombia has recently been accepted to join the Organisation for Economic Co-operation and Development (OECD). It is the third Latin American country to join this organization after Mexico and Chile.

In the region, Colombia is the third most populous country in Latin America after Brazil and Mexico and the fourth largest economy after Argentina.

The OECD is an international organization composed of 37 countries. The main objective of this organization is to promote policies to improve social and economic well-being, as well as to achieve the strongest possible expansion of the economy and employment in the member countries and the developing non-member countries.

Belonging to the OECD “club” means to share standards, public policies and good practices common in the most developed countries. This makes a positive impact in terms of investments, services and international business exchanges, which are good news for European SMEs.

The road to accession

Accession demands considerable efforts to fulfill the requirements and minimum standards set out by the OECD.

Intellectual Property (IP) regulations were one of the obstacles Colombia had to face during the process to join OECD. The United States of America included Colombia on its last 301 USTR report (an annual report that “evaluates the level of adequacy and effectiveness provided by U.S. trading partners’ countries on Intellectual Property Rights (IPRs) protection and enforcement” as it was explained in a previous article here).

Colombia has made significant progress to live up to its responsibilities and must continue to do so. As a result of the taken measures, the country has dramatically reduced its prosecution timeframes. Nowadays, registering a trademark can take as little as four months while in 2000 it took 24 months. The same happened with patents — the time frame was reduced from 55 months to 37.

Colombia to adapt its regulation to demands and policies of the OECD, also has carried out several actions, among them a new copyright law that seeks to protect economic rights for writers, actors, artists and other creators.

What to expect

The OECD will probably propose to create an independent IP authority. Currently the Superintendence of Industry and Commerce (SIC) is the IP authority, which is also in charge of competition law, and consumer and data protection. Many countries already have a specialised office devoted exclusively to IP matters.

We agree with this proposal of an independent entity with its own court system, including the ability to review the granting decision. This function is now on the hands of the highest court of the Administrative law, the Council of State. Unfortunately, this court has a big backlog and IP is not in its priorities. This is a very sensitive matter as most conflicts between parties involve disputes around the validity of IP rights. At this time, civil courts cannot determine the validity of an IP right so cases get suspended until the Council of State makes a decision.

Challenges Colombia must overcome

The Colombian economy is highly dependable on commodities. Coffee, coal and oil have been the major legal Colombian exports. The biggest challenge is to diversify the Colombian offer and the manufacturing of higher value goods and services.

The use of IP by Colombians has been strengthened. Although the number of patent applications filed by locals is very small, the government, through Colciencias, has made an effort to support inventor’s initiatives, but there is still much more to be done.

International organizations like CAF (Andean Development Corporation- Development Bank of Latin America) is also working on increasing the use of the patent system. It has achieved an important growth in Panama, where the pilot project was performed.

Regarding geographical indications, Colombia has more than 26 geographical indications, related to artisanal and agro-food products, among which the most important one is “Café de Colombia”. The SIC has made efforts to seek the protection for more indications that have an impact on international markets.

Colombia has to improve its agenda on IP for innovation. Both the public and private sector must work closely in optimizing the use of IP as an engine for development.

Conclusion

We are confident that Colombia is taking the right steps and will create a safer environment for innovation and foster trust among EU SMEs interested in entering the Colombian market. We strongly believe that, as a new member of the OECD, Colombia will improve its overall innovation process and IP system.

Argentina is one of the countries that will introduce in 2018 some major changes in its Intellectual Property Law.

That´s why all SMEs should be aware that change is coming and make sure to count on specialized practitioners to guide them through these changing times.

The Decree Nº 27/2018, published on January the 11th, 2018, seeks to reduce and simplify proceedings and timeframes before Public Offices. The main aim of these measures is to ensure a public administration synonym of efficiency, effectiveness and quality in its relations with the citizens.

The Decree is in force since January the 12th, 2018, but some of the changes need to be implemented and developed through specific guidelines, which are still under issuance and revision period. Additionally, resolutions issued by the Patent and Trademark Office (PTO) should also be taken into account.

Given the major and substantial changes introduced by the Decree, the same has also been sent, in parallel, to the Houses of the Congress to be studied and approved under the form of a law.

What are the most relevant changes?

Regarding trademarks:

Rhe opposition procedure is changed: if the parties cannot reach a settlement regarding oppositions within a 3-month time period, the PTO will be in charge of resolving about them. Said resolution can be appealed before Federal Courts;

Be aware that partial cancellation for lack of use is introduced;

There is now an obligation to declare the use of the mark, between the year 5thand the end of the year 6th of validity;

Nullity actions may be solved by the PTO, instead of a Court of Justice.

One of the most important changes is the one operated regarding the opposition proceeding: mediation and Court actions are no longer mandatory to overcome an opposition, being the PTO in charge of taking a decision on the subject. This will reduce the costs for SMEs when solving oppositions in this country.

Regarding Patents and Utility Models:

It is no longer necessary to submit the certificate of priority, being enough to claim the priority specifications. It is during the substantive examination that the Examiner might request a copy of the priority document and the corresponding translation;

Reduction of the terms for the proceedings, i.e., the term to pay the substantive examination is reduced from 3 years to 18 months, for example, for Patents, and from 3 years to 3 months, for Utility Models;

For Utility Models once the examination fee is payed, the PTO will conduct the substantive examination, then publish the application and if no observations are filed, the application will be granted.

Regarding Industrial Models and Designs:

Hand-made models and designs can now be protected.

New exceptions regarding the loss of novelty

Possibility to request delaying the publication of the grant for up to six months,

An application may include up to 20 models/designs, as long as they belong to the same class according to the International Classification,

Renewals can now be filed six months before the expiration date and up to six months after said due date (with the corresponding increase in the fees).

IP owners and practitioners will have to monitor further developments and interpretation of this new piece of law, not only from the PTO but also from the House of the Congress. There are still several interesting issues that will be subject to a follow up report. Stay tuned!

The main aim of this new regulation is, not only to harmonize the different national regulations existing at European level, in order to guarantee equality on the protection of personal data regardless of the nationality or place of residence, but also to ensure a legal framework adapted to the digital era.

Because the implementation of the GDPR is almost upon us, companies need to hurry up if they want to comply with the new obligations arising from said Regulation. Among other aspects, EU companies should be aware of:

The need to comply with the principles of accountability and transparency. This involves quite a significant amount of documentation requirements. Other principles such as privacy by design and by default, must also be observed. This entails designing and implementing appropriate technical and organisational measures.

Making an analysis of the potential risks in order to find weaknesses in the treatments performed by the company as regards personal data management.

Obligation to provide, at the time of the collection, some information regarding the identity of the controller (i.e. who decides how and why such data is processed), the purposes of the processing, the legal basis for the processing, the period for which the personal data will be stored and, where applicable, if the controller intends to transfer personal data to a third country or international organisation.

Attend and inform the data subject (i.e. individuals whom the data is about) about several data protection rights such as the right to be forgotten, right to restriction of processing, right to object an automated individual decision-making or right to data portability.

Notify the supervisory authority about any breach regarding personal data (e.g. in Spain, the Spanish Data Protection Agency) without undue delay and, where feasible, no later than 72 hours after being aware of it.

Designate a Data Protection Officer, if the core activities of the company consist of processing operation which require regular and systematic monitoring of data subjects on a large scale or if the core activities of the company is to process special categories of data, as may be the case of business performing profiling activities.

And if the company processes personal data using new technologies, it will be necessary, prior to the processing, to carry out an assessment on the impact of the envisaged processing operations on the ability to ensure appropriate protection of personal data.

In Latin America, data protection is a very topical issue. One of the major developments in the region was the creation in 2003 of the Ibero-American Data Protection Network (RIPD). This network began with representatives of 14 Ibero-American governmental agencies and focused its first activities in trying to advance in the adoption of a new regulatory framework and implementation of data protection authorities in its member states.

After the advances in the legal and institutional fields, the network switched its focus to cooperation activities: exchange of information and experiences, as well as the development of common actions and policies.

In this context, and now enlarged to 21 member states, the RIPD has recently recognized in the “RIPD in 2020”, that there are some countries such as Bolivia, Brazil, Ecuador, El Salvador, Honduras, Guatemala, Panamá, Paraguay and Venezuela, where an additional impulse regarding the legal framework is required.

Thanks to the RIPD’s labour, in June 2017 the “Ibero-American data protection Standards” was presented in Chile. Its main objective is to facilitate the flow of personal data, not only between Ibero-American states, but also beyond their borders, in order to foster innovation and economic growth in the region.

Those Standards were developed taking into consideration other international regulations, such as for instance the GDPR. It seems that one might say that the GDPR has a positive impact beyond the European borders, particularly in Ibero-American States; where the European example seems to inspire them to work towards homogeneous rules in the region facilitating the flow of personal data.

All the aforementioned, is important for European companies: if they are considering to transfer personal data to Latin-American companies, they will need to comply with the GDPR and, in particular:

Make sure that the third country where the company towards which personal data will be transferred is located in a country that ensures an adequate level of protection according to the European Regulation. Currently only Uruguay and Argentina comply with this requirement.

In the absence of the above, it could be possible to guarantee appropriate safeguards through binding corporate rules or standard data protection clauses.

Otherwise, companies could try to have the data transfer covered by one of the exceptions provided in article 49 GDPR: for example, because they have obtained explicit consent from the owner or because the transfer is necessary for the conclusion of a contract.

To sum up, if your company is considering transferring personal data from Europe to Latin America your company must comply with the GDPR. Do not forget it! Time goes by and 25 May 2018 is there!

This article has been written by Natália Barzilai and Gisela de Lamare de Paiva Coelho

As a result of the massive backlog of two hundred and forty-four thousand patents applications as of May, 2017, the Brazilian Patent and Trademark Office (BPTO) has been studying multiple measures to continually reduce the already famous tardiness of its examinations. The BPTO has come up with some controversial ideas.

Successfully, the BPTO has created categories in order to speed up its process, the first one being the “Green Patents”, reducing by 90% the processing time regarding the analysis of environment related innovations. After such a positive outcome, in June, 22, the BPTO extended this project to innovations from the Science and Technology Institutions (STI). Although it is still a temporary strategy limited to a certain number of “STI Patent” applications, the BPTO seeks to reduce from the average time from 10,8 years to 10 months as it is already the case with “Green Patents”.

Another conservative approach to reduce the backlog created by the reduce number of technical examiners, is to join forces with ANVISA (Brazilian Health Agency). As required by the Brazilian IP Law, the BPTO must send all pharmaceutical patents to the Health Agency to be analyzed and check out if there is no forbidden substance in it. Only after obtaining prior approval the BPTO’s technical exam can start. Having such a relevant role in the process of the analysis, the BPTO has proposed ANVISA to send its examiners to the BPTO facilities. Such small measure can help optimize the proceedings not only because the BPTO has an automatic system but because it also prevents losing time between Agencies’ transfers. In addition, the BPTO and ANVISA have established two guidelines in 2017 to fasten ANVISA’s analysis. Now granting of prior approval is based only on the presence of forbidden substance – not on the patentability of the innovation as it used to be. These guidelines not only shorten the analysis period but also provide more legal security as the Health Agency is obliged to grant the approval based only in public health requirement.

Besides those measures, facing the original source of the backlog, the BPTO is studying the possibility of implementing the successful method applied by the Japan Patent Office (JPO). As presented by Takuya Yasui in December, 2017, Japan successfully tackled its backlog by adopting two measures. First, by sub-contracting all preliminary activities, such as research before technical decisions. Today JPO has 10 companies providing its research and, even though they are private companies, supervisors are often retired JPO’s examiners. Second, hiring temporary examiners for 5-year periods which can be renewed for 5 more. With such changes, the time until the exam was reduced from 2,4 years in 2008 to 10,4 months in 2014.

Regarding the most controversial proposals, the BPTO has issued Resolution nº 193 seeking to expedite the examination of Brazilian patent applications under the PCT. In this Resolution, the BPTO has regulated that it will not perform a search of its own and will only incorporate the search already performed by an “office of reference”, meaning, International Searching Authorities (ISA) and International Preliminary Examining Authorities (IPEA).

The BPTO also started a public consultation for a proposal establishing that patent applications filed or with the national phase initiated up to the date of publication of the future regulation, will be granted 90 days, following a notice of admissibility, to decide whether they want to opt or not for a simplified patent application procedure, provided that they meet certain requirements and are not the subject of third-party observations (also called pre-grant oppositions). Patent applications for pharmaceutical products and processes are, in principle, excluded from this simplified procedure, potentially for political reasons and because of the scrutiny of ANVISA regarding these patents.

As reported in a previous publication at Dannemann Siemsen News[1], according to the proposed simplified procedure, the patent applications to which it applies will be automatically allowed without substantive examination, provided that a few requirements are met:

The filing of the patent application or request for entry into the national phase (in the case of PCT applications) should have occurred before the publication date of the proposed regulation;

The application has been published or the early publication requested up to thirty days from the date of publication of the future regulation;

Examination of the patent application should have been requested within 30 days following the publication date of the future regulation;

Annuities payments must be in order; and

No official actions regarding patentability have been published.

Our general advice would be to remove patent applications related to important inventions from the simplified procedure due to the following reasons: (i) the future patents are more likely to face validity challenges; (ii) BPTO’s delay would be compensated somehow since our IP Law currently guarantees a minimum of 10-year patent term from granting date; and (iii) it is possible to put an application to a fast-track examination in case of unauthorized exploitation or through a writ of mandamus.

In particular applicants having a large number of pending patent applications in Brazil should begin to chart a strategy in relation to their portfolio in view of possible new regulations. Meanwhile, we are hoping for the best.

When two constitutional rights are at odds, it is always a difficult conflict to solve, not only for the Government authorities but also for the Courts of Justice, which are often responsible for settling the dispute.

This is precisely the current situation in Chile, which has taken the decision to go further than the rest of the countries in terms of food labelling. Chile has, indeed, decided to implement a legislation that restricts both the nutritional composition of the same, as well as the way to advertise and offer them to the consumer of the relevant market, especially in those cases where aimed at minors.

The Government is basing its decision on the need to protect public health, due to the obesity pandemic that has been afflicting Chile for a decade now and which is causing 1 in 11 deaths in Chile. In fact, according to national studies, one person dies every hour from obesity and 5 out of 10 children are overweight.

The problem is under the spotlight because of the new Health regulation. The new regulation establishes that no manufacturer can disseminate “advertising” aimed at attracting the attention of children under 14 years old regarding products whose nutritional composition includes concentrations of nutrients that exceed the established limits, and which ultimately is an indicator of high levels of sodium, saturated fats or sugars.

In turn, companies manufacturing, distributing and marketing this type of products claim that their industrial property rights regarding the trademarks used on their packaging is being restricted, without previous expropriation or compensation by virtue of such limitation.

The conflict has escalated and has eventually reached the Civil Courts of Justice. The claims were filed by the affected companies against the administrative decisions of the Ministry of Health (under which fines have already been filed against these manufacturers of foodstuffs), requesting for these fines to be waived and to be authorized to use their figurative marks on the packaging of their products.

One of the arguments put forward by these private companies refers to the fact that they are complying with the current legislation on food labelling. They have done so by incorporating the so-called “HIGH IN” warning disclaimers on the packaging of their products in compliance with the “daily food guide”.

They also point out that they have terminated their involvement in the “advertising” activity aimed at children under 14 linked to the “HIGH IN” products, calories, saturated fat, sugars or sodium. Currently, these figurative elements are only used on the packaging of the products and in retail outlets, but not in mass media such as television, newspapers or similar media.

The main argument is that the registered figurative trademarks used on their products cannot be consider as “advertising” directly targeting children under 14, since Trademarks are used to identify or distinguish their products on the market from the ones of their competitors. In other words, the main use for trademarks is to provide distinctiveness, not for advertising purposes.

According to them, the concepts of “brand” and “advertising” are not synonyms; they have a different nature. The main function of a trademark is to “distinguish” products (emanating from the very definition in the Industrial Property Act), not to “advertise” them. The main purpose of advertising is to “promote the consumption of a given product”.

There, the use of the mark on the packaging is for distinguishing purposes, not advertising (mark cannot be placed on the food product itself). It is this distinctive function that allows the consumer in the relevant national market to associate or identify a certain product with the figurative mark that represents it (such as Nike’s check or Apple’s chewed apple), and the quality associated with the product and the producer.

They also pointed out that, according to previous statements from the administrative authority trademarks would not be affected by the new legislation when used for identification purposes. However, it appears that there has been a unilateral change of criterion.

This new interpretative criterion produces effects similar to an expropriation. It prevents the use of an industrial property right, who was previously granted registration by the trademark authority, and which, is now being denied the use, which is at the very essence of the exclusivity granted by IPR (as established in the Chilean Intellectual Property Act and in the TRIPS agreements). On this regard, companies point out that limitations based on public health reasons must be established by law, in compliance with the Constitutional principle of legal reserve regarding limitations on dominance (as is the case, for example, with tobacco, where the law expressly refers to trademarks), a requirement that is not met in this case.

Finally, they claim that the use of the marks complies with the authorization granted through registration by the Trademark Office, and only for distinguishing purposes of the protected goods in accordance with the International Classification. Therefore, there would be no legal ground for the prohibition.

On the other hand, the Chilean Government relies on the preventive nature of the legislation regarding the fight against obesity in Chile and the need to transform the current environment into a healthier one that protects the population.

One of the option to achieve this purpose is by providing clearer and more comprehensible information to the consumer through the “HIGH IN” warning discs. These labels indicate that the foods bearing them contain high levels of sodium, saturated fats or sugars, therefore exceeding the limits established by the Ministry of Health. Another option is to protect children under 14 from overexposure to food “advertising” exceeding health limits established by the Ministry of Health. In this sense, advertising should be understood as any form of promotion, communication, recommendation, propaganda, information or action aimed at promoting the consumption of a given product.

The Food Health Regulations prohibit all kinds of advertising directed to children under 14 “regardless of where it is carried out”. They consider that some elements lead to the conclusion that this age group is the main target of the advertising campaign: “characters and or childish figures, animations, cartoons, toys, children’s music, if it contemplates the presence of people or animals that attract the interest of children under 14”. Furthermore, the legislation also prohibits offering or delivering these products free.

Thus, and even though it is true that trademarks have a distinguishing purpose, it is nonetheless also true that they fulfil multiple functions. One of them is advertising, which allows to position the distinguished product or service and thereby facilitate its promotion, influencing the purchase decision of the final consumer (catchy trademarks are more likely to attract the interest of consumers).

The Government also claims that industrial property rights are not absolute, they do admit limitations. According to the Doha Declaration on TRIPS and Public Health itself, IP rights do not and should not prevent Member States from taking measures to protect public health.

In addition, the definition of “advertising” given by the Food Labelling Act and the Health Regulations is broad enough and does not distinguish whether or not a figure constitutes a trademark. Otherwise, registration as a trademark would be enough to escape the application of the rules set out by the regulation.

Finally, they assert that if these products were to adjust their ingredients and composition to the tables drawn up by the Ministry of Health, they would be free to use the figurative elements on their packaging, even for advertising purposes directly directed to children under 14.

This is an ongoing discussion and both sides have already exposed their arguments. For now, all that remains is to wait for the outcome of these cases and the opinion of the Chilean Courts of Justice. Regardless of the outcome of the claims, the real impact of this legislative change is to be seen on the long term (one or two decades), after which Chile must analyze whether or not they had the intended effect: is there a reduction in obesity rates? Has physical inactivity decrease?

Meanwhile, Chilean consumers are getting used to a new packaging, where classic figurative elements that used to accompany them have disappeared (such as Tony the Tiger on the Frosted Flakes or the colorful M&M’s). The packages are now “plain” and the predominant element is the word mark.

Spanish producers of “Turrón de Alicante” or “Sobrasada de Mallorca” fear no more! Producers of products protected under Geographical Indication in the European Union are getting closer and closer to have the protection of these Geographical Indications extended to Brazilian territory.

But what is a Geographical Indication? How can they benefit your business?

Geographical indications (GIs) are a specific Industrial Property Rights (IPRs) protecting products originating in a given geographical area whose quality or characteristics are due to a particular geographical environment (with its inherent natural and human factors) and all or part of the production steps taking place in the defined geographical area.

GIs involve regulating the already existing methods of production and traditions associated with the protected product so that only those companies producing or marketing products in compliance with the regulated standards can use the GI to distinguish their products. Unlike other categories of IPR, such as Patents (new inventions), Trademarks (new brand names) or Designs (new aesthetical characteristics), GIs do not require innovation. Instead, they tend to protect tradition (existing goods, existing methods of production and existing names of those goods) and are owned only in a collective manner.

GIs are a key tool for groups of SMEs producing local agri-food products in a defined geographical area. Indeed, consumer associate agri-foods with their place of origin and a certain guarantee of quality. In addition, their collective ownership and management (which fits with the nature of the rural and agricultural economy), the lack of innovation required and their commercial attractiveness make GIs one of the most suitable IP rights for agri-food SMEs.

In general, to register a GI you have to go through the following steps*:

1) Identify the specificity of the product, which may derive from its quality, characteristics or reputation.

2) Define the place, territory or region within which the product presents the specificity.

3) Identify the specific conditions of the geographical environment existing in the defined place, territory or region and make sure that the singularity of the product is essentially or exclusively due to those conditions.

4) Define and describe in detail the product and method of production.

5) Register the GI and enjoy the protection granted in the territory for which it has been registered.

GIs are still a sensitive subject. The first indicator is an international system of protection of GIs (Lisbon System). This system enables the applicant entity to obtain protection in several countries (as long as they are part of the Agreement) through a single application filed before the International Bureau. However, so far, this Agreement has had very limited success. In Latin America, only Cuba, Costa Rica, Nicaragua, Mexico and Peru are part of this system. As far as the EU is concern, only the Czech Republic, France, Hungary, Italy and Slovakia have ratified the Agreement.

Secondly, GI owners might have to deal with the fact that Trademarks consisting of or containing the expression protected by the GI (in the country or territory of origin, e.g. the European Union) might have already been registered and/or used in connection with the same goods in third countries. Unfortunately, applicable Law in most Latin America grants priority to those earlier trademarks, unless you can prove that earlier trademarks are deceptive or were applied for in bad faith.

Thirdly, GIs protected in the EU and, consequently, identifying products originating from a specific area and complying with specific characteristics, may, however, be considered generic names in third countries (“Queso Parmesano” in Argentina, for example). In such cases, the offices of third country will deny registration of these Geographical Indications. In some cases, it is the own national legislations that assigned a generic nature to the. This is the case of the Argentinian Food Code, which assigns a generic nature to several GIs protected in the European Union, e.g.: “Turrón de Jijona”, “Turrón de Alicante”. In these cases, registration of the GI will only be possible if it is preceded by negotiations between both parties’ Governments aimed at the mutual recognition of GIs and the abolition of that regulation.

Finally, whereas producers in the EU can benefit from a single registration procedure (with unitary effects in all Member States), recognition of GIs in Latin American countries, in most cases, requires a separate procedure before each national competent authority

It is in this context that bilateral agreements, concluded between the EU and certain Latin American countries, establishing mutual recognition of GIs, become important. In particular, the EU has concluded agreements for mutual recognition of agricultural GIs with Chile, Colombia, Peru, Mexico, Costa Rica, El Salvador, Guatemala and Honduras. We can now add Brazil to this list.

Indeed, as part of the negotiations between Europe and Brazil, in the framework of the MERCOSUR-EU negotiations, the Instituto Nacional da Propiedade Industrial (INPI) published the much-awaited Normative Instruction 79/2017. Take into account that this is all the more important since Brazil is not a member of the Lisbon Agreement or the Madrid System (for GIs protected through collective trademarks or certification mark). This Instruction, from October 30, established the first basis of this publication. The list of GIs was finally published on November 7, including well-known Geographical Indications, such as “Oporto” for Portugal, the Dutch “Gouda”, the Italian “Grana Padano” or even the French “Roquefort”. The list is accessible through INPI Brazil’s website. Be aware, though, that third parties have now 30 days to submit oppositions to the registration of these GIs in Brazil and you can expect opposition.

Take into account that producers are already commercializing most of these products in Brazil. Which leads to the following questions: how will the agrifood related industries be affected? Might this then generate some friction between local producers and GI’s owners in the EU? What EU Gi’s will be next? How will these IPR going to be really enforced? The situation will certainly lead to interesting developments and we will keep you informed from the Latin America IPR SME Helpdesk.

Do you want to know how your business can benefit from Geographical Indications? Are you planning to commercialize your products in Latin America? Do you require further information on costs or proceedings before taking the decision? If so, do not hesitate to check the Latin America IPR SME Helpdesk’s Factsheets on Geographical Indications (general or on Chile).

The EU-funded initiative will provide EU SMEs (either current or potential) with first-line, business focused information on any Intellectual Property related issue in Latin America.

If you require a tailor made consultation, please do not hesitate to contact the Helpline. It is free, fast and confidential! Moreover, the IP experts will support you in English, Spanish, French, German or Portuguese.

A well-planned, tailor made IP protection and enforcement strategy is key to success in every new business adventure, particularly when you are going abroad. Seek professional IP advice before you take any step if you want to prevent undesired situations and check our recommendations on some of the most important IP aspects to be included in your checklist before, during and after you enter the Latin American countries.

1. Use technology watch and competitive intelligence tools in the destination marketplaces

Fix your aims, set-up your monitoring activity according to your strategy, look for sources to watch your marketplace in publicly available information and commercial software and make your own key performance indicators of IP information collected or outsource these activities.

2. Determine the Freedom to Operate (clearance for technology, innovations, and patents)

A prior in-depth analysis of marketplace in Mercosur and Chile, by sectors of machinery technologies it is a sound decision (also known as a market clearance search). Take into account to performance searches on international databases is useful the IPC (International Patent Classification).

Keep in mind that can it be risky to attempt to bring an innovation in machines to Mercosur market without first conducting a freedom-to-operate search, as such products (and their patents, including parts and tools) may be vulnerable to infringement suits, potentially resulting in costly litigation procedures in other jurisdiction and/or forcing your company to withdraw a product from the market altogether.

3. Search prior art of your machinery and parts and define its novelty

If your firm is researcher/developer of technologies, should define the prior art for each innovation in order to avoid spending resources or commit infringement of third parties rights, or outsource this work.

Ensure that the agreements specify, in as much detail as possible intangible assets of intellectual nature (including references non-disclosure data, secrets and relevant confidential information) supplied before and during the operations in the Mercosur and Chilean market, through audits and inventories.

Even if it may sound obvious, registering your IPR at an early stage of your entry into the Mercosur or Chilean market has a deterrent effect and makes enforcement more effective. It also helps to avoid other problems, such as bad faith applications.

6. Register your trademarks in the Customs Service (where available)

Registration will facilitate the detection and blockage of infringing goods through special service of Custom agency available for trademarks in order to apply border measures. This type of register is not provided by all the Latin American Customs authorities and is independent from the National Intellectual Property Office’s.

Normally, you can avoid cancellation of your IP Rights by paying an additional fee during a certain period (3 or 6 months after expiration). An expert with expertise on the local regulation and the field will allow you to prevent incurring in extra costs and even loosing your rights.

8. Communicate with public Intellectual Property-related authorities

A fluent relationship and communication with the IP authorities, such as the police or customs agents, will allow more agile decision-making and obtaining more detailed information in order to defend and enforce your rights. It is also recommended to send a representative to police raids and seizures.

9. Communicate with other IPR owners

Take into account that counterfeiters tend to use the same distribution channels, storage points and routes of entry. Joining efforts with other IPR owners could be beneficial for all parties.

10. Consider other alternatives before claim before courts

Sometimes sending a «Cease-and-Desist Letter» is sufficient to stop the infringement, especially in cases where the infringer is a small retailer.

11. Follow good practices from industries’ associations

Joining industries´ associations may be useful in order to join efforts and develop good practices based on the experience of each member. They are also used to develop joint awareness campaigns addressed to users and clients.

12. Off-shoring anti-counterfeiting support

Detecting the country of origin of counterfeited products may help you to block the goods in a very early stage of the distribution channels and can help you to save costs. This is particularly effective if your IPRs are also registered in the country of origin of the goods.

Micro, Small and Medium-sized Enterprises (MSMEs) are a fundamental component of the productive fabric of the majority of the world’s economies. The European Union, CAINCO (Chamber of Commerce of Santa Cruz in Bolivia), ECLAC (the UN Economic Commission for Latin America and the Caribbean), EUROCHAMBRES (the Association of European Chambers of Commerce) and PROMÉXICO organized a series of thematic events in Mexico City on 10th– 14th October in order to share experiences and to consolidate the cooperation between the European and the Latin American and the Caribbean private and public actors that support the development of the MSMEs. Other EU-funded programmes, such as the Latin America IPR SME Helpdesk, ELAN Network, ELAN Biz and ADESEP for Central America have also been involved in the organization of the economic cooperation week.

The EUROMIPYME seminar “Latin America and Europe facing technological disruption: a new era of policies and institutions for MSMEs” organized by ECLAC opened the series of events. The seminar facilitated the discussion on how to build a common language for the design of a new generation of development tools for MSMEs, where cooperation between both regions, supported by a fluid public-private dialogue, can become a key factor for transformation. Eli Salis, IP expert of the Latin America IPR SME Helpdesk intervened as panellist during the session on public private dialogue.

On the 11th of October, Paolo Baldan, from EUROCHAMBRES, as partner of the Latin America IPR SME Helpdesk, presented the services of the Helpdesk to the CEOs of the European Bilateral chambers and EUROCAMARAS of the 7 countries covered by the ELAN BIZ programme (Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico and Perú). He reiterated the full availability of the Helpdesk to organize free of charge training modules on Intellectual Property (IP) on use and protection of trademarks, designs, patents and copyright in Latin America. The Helpdesk will obviously adapt the session according to the priority countries, sectors and topics and time availability. The Helpdesk was also represented on the 12th of October at the EU-LAC Business Forum organized by CAINCO and EUROCHAMBRES bringing in the role of IP protection in the market access facilitation and innovation process. The importance of the bi-regional cooperation on building information schemes on Intellectual Property and the provision of training and capacity building programmes such as the Latin America IPR SME Helpdesk was underlined in front of an audience of 200 EU and LAC private and public sector representatives. The event was also an occasion to outline a series of business driven proposals and recommendations which should guide decision-makers in adopting an EU-LAC policy framework for a business friendly environment that is conducive to sustainable growth.

Lastly, César Elvira Fernandez, IP expert of the Latin America IPR SME Helpdesk, presented the Helpdesk services and business cases of success at the annual event of the AL-Invest 5 programme, organised by CAINCO on 13 October 2017.

Issues regarding competition law and IP can, on their own, provoke sever headaches. However, these are not isolated subjects that never cross paths. Problems can grow exponentially when they do and require every bit of our attention and perspicacity.

Competition law and IP cannot be considered as pursuing opposite goals. Quite on the contrary, they must be seen as complementary. Granting exclusive rights through IP promotes innovation and competition between undertakings, the final beneficiary being the customer. This affirmation is also true when talking about Competition law: ensuring competition on the merits and avoiding distortion of the competition, which in the end will promote general economic welfare. In their dynamic relation, competition does not seek to impede the existence of exclusive rights, rather it seeks to avoid an abuse in the exploitation of those rights.

Compulsory licensing is one of the important ‘flexibilities’ recognized under Article 31 of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). This is true since it makes it easier for WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector to avoid the trouble of negotiating expensive licenses with big pharmaceutical companies who are in a clear position of power in these negotiations. So far, only two countries in Latin America (Brazil and Ecuador) have made effective use of compulsory licensing provisions.

A compulsory license is generally ordered as a remedy when intellectual property law is not capable to offer a suitable remedy to a situation, usually because the owner of the IPR and the licensee are incapable of reaching a satisfactory settlement. Through these licenses, the owner of intellectual property is required to provide at least one other firm or a government with a right to import, reproduce, and/or sell the intellectual property.

Patent legislation in Latin America provides for different grounds for the granting of compulsory license:

Although some Free Trade Agreements (FTAs) have been signed between Latin American countries and Europe (with Mexico, Chile and Colombia, for example) such agreements have not introduced any limitations on the possible grounds for compulsory licenses.

When granting a compulsory license, the competent authority will face a number of different challenges. First, it must justify the grant of such a license under one of the conditions above mentioned. Second, the authority will have to establish the life of the compulsory license. Finally, setting a correct level of royalty payment is another challenge to ensure proper retribution of the patent owner.

Real life cases: Brazil and Ecuador

In 2007, Brazil decided to override the patent on an AIDS drug in order to make it available under the country’s free treatment program.

Prior investigation lead the government to note that Merck was selling its drug at cheaper prices in countries at the same development level but with fewer people in need of treatment than Brazil; the Indian generic versions were much cheaper than Merck’s product.

Prior to the grant, the Brazilian government engaged in negotiations with the patent holder in order to achieve an acceptable price reduction. During these negotiations, Merck offered a price reduction from US$1.59 to 1.10 per dose, which was deemed unsatisfactory by the Brazilian government. Hence, through Presidential Decree No. 6.108 (4 May 2007) the government decided the grant of a “compulsory license, on the ground of public interest, of Efavirenz’s patents, for public non-commercial use” for a period of 5 years (renewable for the same period31) and a royalty fee for the patent owner of 1.5 % of the finished product.

This decision was far from popular. Although health activists, such as Médecins Sans Frontières, reacted positively, pharmaceutical industries were not pleased with the decision.

In Ecuador, the granting of compulsory licenses is based on the Presidential Decree No. 118 of November 16, 2009, that established “of public interest, access to medicines used for the treatment of diseases that affect the population of Ecuador and that are priorities for public health”. It also specifically specified that compulsory licenses could be issued for patents protecting medicines for human use that are necessary for the treatment of such diseases.

Following this Presidential Decree, the IEPI (Insituto Ecuatoriano de la Propiedad Intelectual) issued a Resolution (Resolution No. 10-04 P) with Guidelines on how to issue a compulsory license in the case of pharmaceutical patents.

Thanks to these instruments, on April 2010, the government of Ecuador granted a compulsory license for an anti-retroviral drug, to Eskegroup SA, a local distributor of a generic produced by an Indian company.

The government of Ecuador, on June 2012, granted a second compulsory license to Acromax Laboratorio Quimico Farmaceutico S.A. regarding a drug protected by and held by the Glaxo Group. After confirmation by the Ministry of Public Health that the pharmaceutical was a priority medicine, the compulsory license was finally granted. The compulsory license is available until the expiry of the patent in May 2018. This action was taken in order to enable the government to further expand access to more affordable treatments for HIV and facilitate local production of the product, leading to an important reduction in costs.

Conclusion

As examined above, although only used in three cases so far, compulsory licenses have been used against pharmaceutical patents. The European Court of Justice has been more inclined to use compulsory licenses as a “punishment” in cases of abuse of dominant position, rather than as a pressure element. In Europe, case law on the subject is rather abundant starting with Magill, which set the basic requirements, later on developed through IMS Health.

In any case, this opens up an interesting debate about pharmaceutical patents, drug prices, health imperatives and incentives. Some medicines are not even available -period- in some markets. One of the reason is that our current patent system does not provide sufficient incentives in R&D for solutions to problems that mostly affect the poor. Another challenge arises from the very nature of the patent regime: innovators are rewarded with a temporary monopoly. In the context of life-saving drugs or vaccines, this monopoly will have a more meaningful impact on poor people who cannot afford the essential drug.

One solution to face this challenge might be voluntary licensing involving contracts with generic manufacturers to distribute and sell drugs in markets where there is no profit to make for branded companies. Voluntary licensing could present several advantages: generic manufacturers would be able to distribute patented medicines in certain countries; multiple licensees can be granted allowing to sell generic versions at prices freely established in certain low and middle-income nations; royalties will be paid to patent owners or economies of scale can be made. All the above would avoid raising competition concerns by creating effective competition through licenses offered to multiple generic manufacturers.

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The Latin America IPR SME Helpdesk team proudly welcomes you to its brand new blog, in which you will find updated information concerning Intellectual Property Rights in Latin America, as well as other interesting information about SMEs, Internationalization, R&D or Innovation.

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The Latin America IPR SME Helpdesk is a free service for SMEs which provides practical, objective and factual information about Intellectual Property Rights in Latin America. The services are not of a legal or advisory nature and no responsibility is accepted for the results of any actions made on the basis of its services. The content and opinions expressed are those of the authors and do not necessarily represent the views of the European Commission and/or the Executive Agency for Small and Medium-sized Enterprises or any other body of the European Union.

Before taking specific actions in relation to IPR protection or enforcement all customers are advised to seek independent advice. Neither the European Commission nor the Agency may be held responsible for the use which may be made of the information contained herein.
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